tv Nightly Business Report PBS April 8, 2019 5:00pm-5:31pm PDT
this is "nightly business report" with sue herera and bill >> at a crossroads, one of the most contentious earnings seasons in years gets underway this week, it could determine whether the rally takes a rest or rips higher. tax tips with a week left to file. ther still some things you can do to lower your tax bill. >> flying colors, airline quality is up, and passengers couldn't be happier. those stories and much more tonight on nightly business report for this monday april 8th. good evening, everyone, and welcome, the focus has shifted toearnings corporate america will start reporting quarterly results this week, providingnvestors with a look at the financial health of potential investment. and ites c at an interesting
time, stocks have rallied this year and optimisak isg hold. the major indexes sit near all time highs, even despite today's mixe. the dow jones fell 83 points. dragged lower by a drop in shares. the nasdaq added 15 and the s&p 500 was up extending its win streak to 8. make takes a look athere the market stands asgearnings season underway. >> stocksne rem a dramatic round trip of agh record just in time for a corporate earnings season that will help determine if the earnings are justified. e s&p 500 is almost at its exact level since earl the ensuing rally has dom as those recession worries appeared overblown. oil has recovered and the fed has backed awarom its rate hike plan. the rallyitself has been
resilient, helped by low bond yield and thef sturdiness large cap tech stocks. the s&p 500 is 2% below its record peak. it first traded this high 14 months ago. this means thearket has formed a base for further upside and knows that strong starts to a year tend to lead to more gains in the months to come. skeptics are arguinghe rally has become uneven. fewer stocks are making new high andca cyc areas had lagged badly. the isiex has come even as profit forecasts have slid to a drop of about 4% from a year the debate now is whether stocks are correct in looking past this early year weakness, toward an anticipated revival of profit notice second half. stocks historically have been able to with stand a corporate profit g
for this reason, the companies say about the outlook for coming quarters might be the int crucial facto determining the market's path through the spring. for nightly business report, i'm mike sangoli. >> joining us now, jack aplin at crescent wealth advisers. always good to see y. >> thanks, bill. here we sit, close to all time highs and we're expecting a pretty lousy earnings season, is that not in the market or what's going on here? >> i think it is in the market, but it is a disappointment, the fact is, this will be the first quarter in three years wheree had negative earnings growth, meaning that this quarter's earnings results will be about -- expected to be 4 1/2% lower than the fst quarter and a lot of it is reall related to margin compression. the fact is, interestrates, even though they are low, short
term interest rates are three quarters of a percentage point higher now than they were a year ago. and wages are up. it's great that we have a tight labor market and those strong growth and jobs,do but tha come with about a 3.3% year over year wagegain. that's something that companies have a difficult time passing >> which sectors do you think will perform better this season? this earnings season, and which ones do you think wlag? >> the financials and the materials are the ones that are going to bear thehi brunt of earnings decline. financials, yes, short term rates a , but long term rates have come down. and that's just the wrong formula for banks that try to borrow the short end and put money out longer term.al mate the same thing, commodities just haven't really delivered the gains in this kind
of low inflation environment. where the growth has been has been in communications, so the telecom sector, finally, the end ta those price wars, they're seeing somelization there. those earnings will likely go higher. consumer fdiscretionary, tt is, with those higher paychecks is some higher spending, and nary of the discret companies are going to benefit from that. >> the bottom line m not be that strong, but as usual, we will listen for what the ceo's have to say about the next mi santolli suggested maybe the mark's anticipating we'll hear better news down the road, what do you think? >> it's hard to say. the fact is, that this earnings decline couldtr be p's fed, right? this couldld be the scapegoat tt a lot of ceo's are using to say, things aren't going to be quite as rosie as they have expected.
i'm not so sure it's a lock own good news going-forward. i was particularly disturbed with of the federal express news, and some of the underpinnings of what's going on. we'll >> we will see. jack as always, thanks. jack applin with crescent wealth management. a fresh read on the manufacturing sector, factory orders fell.5% in february, marking the fourth drop in five months. orders were pulled down by a em weakerd for machinery and electronic products th manufacturing sector which accounts for 12% of the economy appears to be slowing amid rising inventorie the senate finance committee takes up the issue of rising escription drug prices tomorrow. the focus will be on pharmacy benefit managers who operate as middle you will likely hr about the
cost of insulin, a life saving drug that's been use as a proxy for rising prices across the prescription drug market. bertha coombs has more for us. >> reporter: this teacher struggled a lot, l night bingo to help fund her choir's weekend concert. at home she struggled over bills to pay for her son's insulin. >> we've had our electricity cut of because i needed to decide, doi get h insulin and test strips? so i didn't pay the electricity bill. >> it costs her family $1200 a month for insulin before they hit their deductible. it wasck sticker s for hunter when he went away to school. he ended up in in the emergency room t to rationen. >> he tried to not eat or then eating and not giving enough
insulin. >> the indiana teacher testified about it in the senate with the finance committee forced to hold its third hearing on drug prices this week, and energy and ce comm second hearing. >> i believe there's going to be movement. >> insulin list prices have doled since 2012. it's in part because insurers and plans have demanded big prices from them that could result in lower drug prices for some seniors at the pharmacy, it will take bipartisan action in congress to require tho >> if ty were to agree, i think it's going to be in the field of transparency. of course the big que is, what form that legislation will take. >> critics andew transparency
rules aren't enough. the drug prices are used to lower drug premium costs. getting rid of them will cost the government an extra $20 billion a yearex over the decade due to higher premiums, according to government actuaries. >> every other western country has solved this problem, and they do it with a variety of nt government-led agreements, and negotiated reimbursement prices into their private markets. and we can certaly do thator something like ainsulin. >>ll kathy knows is families like hers need relief. >>'m not against people making a profit. but at what >> she thinks it's time to hold congress and the health industry's feet to the fire to lower costs. for nightly business report, i'm bertha coombs. >> promise in a smallca cli trial of patients with lymphoma. researchers tested the 1reatment in patients with the cancer.
they say another cli is warranted on lymphoma patients as well as breast, head and neck rencers. thement teaches the body to recognize tumors and attack them. it's not ath vaccine i traditional sense but it's been called that because it auses a person's immune system t fight the disease. time to take a look at some oftoday's upgrades and downgrades. they were all downgrades. boeing downgraded to neutral. the analyst expects ldeger ys with the 737 max. price target now $4. shares closed at 374.52. that's down more than 4%. which was the reason for today's dip in the dow. southwest airlines was downgraded to market perform from outperform by raymond james. surrounding the timing of the fix for the bing 737 max planes. the firm maintainedts long
term confidence in that airline. southwest closed 2 1/2% lower on the day. ge was young graded. thit sev of the challenges facing the company are being underestimated. ice target now, $5. ge lost 5% to 9.49. starbucks was downaded to neutral from buy at ebs. the stocks valuation after a big runup since last june. the price target is 78. the shares ended this session at 75.20 today. and they did hit a 52 week high. harley-davidson downgraded to market perform. the price target is 41, harley's shares closedt 40.29. we found one upgrade, procter & gamble was es to outperform from market at wells fargo. the organizational changes have created aen of urgency to
accountability into the company. p&g shares hit a 52 week high ending at 104.97. disney's ambitious plans to push into the highly competitive video pinterest has filed for an o hat could be worth $9 million. a pinterest ipo would follow the recent offering by lyft which stumbled a bit after its recent for comparison, facebook and instagram have users in the .
chuck e. cheese is return wall street p a complex structure, chuck e. cheese's speci is merging with a purpose company, making it the first restaurant company to enter the public market in the last four years. and the ceo says the time is right. >> this is the the perfeim for chuck e. cheese to return to the public market. we launched brand new food, we revitalized ourntertainment and our guests have rewarded us with that with great sustained sales gr. >> chuck. cheese is in 47 states. teenagers have money to spend. a new survey shows just how much. according to piperafterr jaffre spend on lululemon, ulta and chick-fil-a.
the industry is trying to figure out the shop iping habits of teens. disney's hosting an analyst day lat this week, the company aexpected to offer detailut its new streaming video service to be called disney pl julia boorstin takes a look. >> reporter: disney plus the center of his strategy. the content direct to consumers. now we're hoping to find out key details, incding how much the service will cost. iger said it will be less than netflix, when it will launch. after iger l saide 2019. one thing's for sure, to differentiate from other stseaming ices, we expect iger to focus on disney's unique brandsncluding marvel and star wars. creating new exclusive content which will live on the platform, with the same productio value of movies.
disney's likely to showcasehe ep vault of its libraries including tv shows and movies. >> this i exciting time for the company because fox acquisition, that's a whole lot of content disney will be able to add to their service. you have avatar, deadpool. titanic. it's exciting, that's the reason why they did the fox acquisition. >> with so much content we expect them to show what tools it will offer toat nav all those options. >> how many subscribers will disney be able to attract? a lot of that depends on how much the service costs, and how much the exclusive content is st have for families. analysts are bullish that disney will be able touickly grow its subscriber base. disney already has direct t with millions of consumers around the world every year, thanksme to its t parks and consumer products. >> given there's a great fan
we target there's 50 million homes we view as the low horging fruithe company, these are households that have already engaged with starwars, marvel and pixar. >> another analysts are equally optimistic. disney is the only traditionala meompany with a scale, and brand recognition to join netflix and amazon as the leader in the marketplace for video. ho fast the app growson depends ts price and the must have appeal of the app's cont sony may be the target of an activist investor. that's where we begin tonight's market focus daniel lobe's h fged is directing a third point -- sony's movie studio could be a takeover t wells fargo's next ceo should not come from wall street or
from inside the bank. that is according to berkshire ho isway's warren buffett also wells fargo's biggest individual shareholder. thehares add a dime to 48.88. lyft i threatening to sue morgan stanley. the rideng hai firm that recently went public is accusing the bank of market certain products that would help preinvestors bet against the stock and profit if the shares went do morgan stanley has denied those allegations. shares fell 5.5%. morgan stanley rose fractio to 44.98. shares of zogenix lost a quarter of their value late today after the fda rejected a marketing application for one of its dru that treats a specific type of seizure. they makeare disease therapies and will work to respond to the issues raised by the agency. as we mentioned, the stock fell
sharply in after hours trading it finishedhe regular session slightly lower. it is cleanse time for those whoe h waited to file their taxes. just one week to make a few last minute moves that could trim your tax bill and save you some money. we calsd in usual our senior personal finance correspondent sharon epperson with some tips, what can people do at this la minute to save a little more. >> let's talk about how y boost your savings and trim your taxes. one way is an ira. if you have no company workplace plan, can you put the fulou into an ira by april 15th. if you do have a 401(k) plan at work, you're going to have some income limits ther i terms of how much you can deduct, but it a place to start. the next place is to look at a health savings account.
if you have a high deductible health insurance plan. you're eligible to put money into a health savings account p you're an individual, 6900 for a faly, and can y add another $1,000 if you're 55 or older. those are two places you can save money, and then alsoave on your taxes. can a strong market, you often see freelancers, people take those extra jobs. i have a lot of friends who are retired who arece freel in various industries. are there special tax benefits well?hat as >> you're an independent contractor. you get to fill out a special tax form, a schedule c, you can put in some expenses that could save you money. your business meals, office pp es, required equipment, the new laptop you had to get for that job. those a possible deductions on your taxes as long as you have the right documentation and you put that on the correct form. >> now to parents, we both are parents, but yours are a little older, my dear. are there things that paren
can do -- >> for this great tax credit which means dollar for dollar savings on your taxes. getting the child care tax credit is wonderful, but they have to be wonderful, they have to baby-sitters or day care summer day camp also counts. if you're looking into it and they're youngerkids, this is something you want to look into. overnight cp does not qualify, but what you can save and what you can claim is 35% of qualifying expenses for one child, up to $3,000, for 2 children or more, up to $6,000. that could be significant ca particularly a costs >> they sure have. thanks s. coming up, all aboard for vacationer m with competition on the rise, aor cruise line is pouring billions into mod fleet and the experience on board. will it pay off?
that story next on the nightly we have an update on the college admissions scandal, one coach and 13 parents, including felicity huffm pleaded guilty to one felony count of conspiracy to commit mail fraud and honest servicesauail the justice department as you know, says all defendants have agreedith the irs now to pay back taxes, in total 50 people wereharged last month in what prosecutors say is the largest college admissions fraud case ever. a new report shows the quality of airline service in the u.s. is at a record, with a
substantial drop in umber of complaints filed with the department of transportation. which airlinee soared to top spot and which struggled? phil lebeau has the answers. >> here's one you may not believe, especially if you photograph a lot. airlines are doing a better job fp wichita state universityas ured on time, arriva how often people were bumped fro a flight, the percentage of mishandled bags, and the number of cnts sent to the department of transportation. nd last year, airline service improved. >> it's the best year i've ever had as far as the airline quality rating numbers are concerned. three o of the four things we track got better again this year, so i'd have to say it's doing well. >> one impvement forhe airline stands out. the number of people bumped from flights wch was cult in half. not surprising, since airline ceo's told lawmakers in 2017 they would eliminate or curb the
practice of overselling flights. >> they have part of 17 to fix it and all of 18. and it looks like they did, and it's encouraging for the flying public. delt just ahead of jet blue and southwest. meanwhile, nspirit, amerind frontier had the lowest scor while this report is encouraging, it failed to track how often people complain about airline service on social media, whic is increasingly how travelers tell airlines osomething went wrong a trip. phil lebeau nightly business repo chicago. and from the ski to the sea now, the cruise ships industry undergoing big changes these days. and that includes expanding theiret fle and upgrading their existing ones. s si sale for us tonight. >> reporter: despite recent dramat events vacationers still seem to love cruising. >> the cruise lines are full.
our three brands are booked better than any other time in the historyf the company. and on board revenue continues to be record >> an estimated 30 million are expected to board ships across the world. a 6% increase from last year. new players like virgin voyages setting sale in 2020 are pushing the industry leaders to not only build new ships but operate their current fleet. place. my happy i've been cruising since i was in my teens. >> i love being at sea, it's a great vacation. everything's included. 's a fun vacation. >> i can party, i can lax. sea. enjoy the and all at one costs. >> aboard the norwegian sky, this ship was originally built in 99, jus earlier this year, it underwen a three-week complete gut renovation.
they have spent millions on modernizing its fleet. and is part of an industry wide effort. carnival, the largest of the three cruese l is already spending billions on updates and refurbishments the goal is to keep their loyal passengers happy, while also appenging to y customers. like millennials who are spending more on trel. today people communicate through photos and experiences, and we want to make sure that when our guests -- on any given day, there's 50,000 guests on board our ships. theynt to make sur experience and share those experiences with their frien. >> experts do caution that the cruising sector is highly dependent on a strong economy to keep ships full. cruise lines may be forced to cut prices if consumers pull back on hnd much they s on travel. for nightly business report, i'm